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US FERC clears Permian oil pipeline EPIC's rates, three others caught in backlog


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Washington — The 550,000 b/d EPIC pipeline due to start moving Permian crude later this year received approval late Thursday of its initial rates for shippers, easing uncertainty created by a backlog of cases at the US Federal Energy Regulatory Commission.

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FERC issued conditional approval of EPIC's rate structure and approved three other oil pipeline cases, bringing the backlog of uncontested petitions down to six pipelines representing about 1 million b/d of oil pipeline capacity.

Plains All American Pipeline's 585,000 b/d Cactus II crude pipeline from the Permian is among those still waiting.

EPIC CEO Phil Mezey had complained to FERC in January that the delay in considering the petition was placing the project timeline in "some jeopardy and causing concern to our shippers." The company filed the petition in October and had expected a decision by January, based on past practice by FERC.

The latest orders show FERC is focused on how oil pipelines treat affiliated shippers -- a marketing affiliate created by the parent company that owns the pipeline -- and that they do not give them unfair benefits not available to unaffiliated shippers.

"The Commission is paying attention to affiliate relationships," Christi Tezak, managing director of ClearView Energy Partners, said in a note to clients Friday.

FERC also conditionally approved initial rates for EnLink's 54,000 b/d NGL expansion from Mont Belvieu, Texas, to central Louisiana; and Plantation Pipe Line's 21,000 b/d refined products expansion into Roanoke, Virginia.

It gave outright approval to the 100,000 b/d Iron Horse pipeline in Wyoming's Powder River Basin, owned by Tallgrass Energy and Silver Creek Midstream.

The three pipelines with conditional approvals must file affidavits swearing that at least one unaffiliated shipper plans to use the service, otherwise they must use cost-of-service rates.

Before FERC started acting on the cases last month, the backlog of 15 petitions represented about 2.4 million b/d in oil pipeline capacity.

Buckeye Partners' petition for bi-directional service on its Laurel refined products pipeline in Pennsylvania has waited even longer for a decision, since April 2018. But unlike the other uncontested cases, it drew comments from the Pennsylvania Public Utility Commission.

The pipeline developers have filed petitions for declaratory order, a voluntary process done before a new pipeline or expansion starts service. A FERC approval confirms any benefits given to anchor shippers are appropriate under the Interstate Commerce Act. Without the order, the terms could be challenged as unfair by future shippers on the line and spark a long and expensive tariff fight.

-- Meghan Gordon,

-- Edited by Alisdair Bowles,